Rail travel may come under GST

Railway travel, capitation fees or donations in educational institutes are among the many new services that may come under the proposed Goods and Services Tax (GST).

The finance ministry is likely to approve a proposal that most services except 27 categories listed on a “negative list” should be brought under the GST, which the government plans to introduce from April.

The services that could come under the GST are the ones provided by government for a fee or user-charge, transportation of passengers by railways, renting of vacant land for commercial use excluding agriculture use, capitation fees or donation in education institutes, non-compete services, some additional services relating to construction and real estate.

The negative list contains 27 services including funeral, burial and mortuary agencies, interest paid on deposits by bank, services provided by independent journalists, dividend on investments, and transport of passenger in public transport are excluded from paying tax.

In March, the government introduced a Constitution Amendment Bill to roll out a uniform GST in the country.

If adopted, GST can dramatically alter tax administration by giving a one-shot solution to a welter of levies such as excise, value added tax and octroi. The bill has proposed a dual GST structure — one for Centre and the other for states—but has steered clear of making commitment on rates.

The Bill stipulates that an all-powerful GST council will be created that will act as a joint forum for the Centre and the States.